Accounting Standards - Transitional Measures and Arrangements

A new Tax and Duty Manual, Schedule 17A, has been published. It outlines changes to Schedule 17A of the Taxes Consolidation Act 1997, effected by section 42 Finance Act 2014, which amended the definition of "relevant accounting standards" in the Schedule.

The purpose of Schedule 17A is to provide transitional rules for tax purposes which apply when a company moves from one accounting standard to another. The rules seek to ensure that no amount of trading income, or deductible trading expenses, that would be taken into account in computing profits in accordance with "relevant accounting standards", are either doubly counted or fall out of charge to tax as a result of the transition to a new standard.

The up-dated definition extends the transitional arrangements to companies that change their accounting standards to comply with up-dated Irish accounting standards (to the extent that they embody international accounting standards). The change is of relevance, for example, for companies that are transitioning to the new Irish and UK Financial Reporting Standard FRS 102.

The amendment applies to any accounting period beginning on or after 1 January 2015. However, if a company adopted the New Irish ‘Generally Accepted Accounting Practice’ (GAAP) standards prior to 1 January 2015, the transitional rules will be applied administratively, as appropriate, to these early adopters.

26 May 2015